BEIJING: China’s top court has underscored the importance of fostering a well-regulated market with fair competition and combating unfair practices through the rule of law, calling on judges nationwide to provide strong legal support to promote high-quality economic development.
Last week, the Supreme People’s Court released details of nine landmark cases, emphasizing the need to intensify judicial efforts against unfair competition practices, particularly in emerging and crucial sectors such as artificial intelligence, new energy and the platform economy.
The cases cover practices such as counterfeiting, stealing trade secrets, damaging competitors’ reputations and misleading advertising. The SPC said the rulings aim to clarify what businesses can and cannot do in seeking a competitive advantage, while helping create a fair and orderly market environment. One of the cases involved a software company that used AI to generate article titles and write posts about a competing technology company.
The posts consisted entirely of introductions and reviews of the competitor’s products and were published on the software company’s website, with links directing readers to its own products. The technology company filed a lawsuit with the Xinwu District People’s Court in Wuxi, Jiangsu province. The court found that the software company had used AI and other tools to produce and publish a large number of articles about its competitor in an attempt to attract users through internet search engines.
By generating content designed to appear prominently in search results, the company sought to redirect online traffic and potential customers from its competitor to its own products, the court said.
The court also found that the practice flooded the internet with low-quality, unwanted information, which not only reduced the competitor’s user traffic and business opportunities but also disrupted the normal order of the market.
It ruled that the company had engaged in unfair competition and ordered it to compensate the technology company for its economic losses.
The SPC said the ruling clarifies that using AI to generate and publish fabricated articles containing links to a company’s own products for the purpose of attracting online traffic violates the principles of good faith and accepted business practices, and therefore constitutes unfair competition.
The case provides an example of how courts can deal with new forms of unfair competition arising from the use of AI and other emerging technologies, the SPC said.
Another case involved a media company that posted livestream sales videos through three accounts on the same platform, using content featuring celebrity Huang. A technology company and an internet company held exclusive rights to the content.
The media company altered the original audio in the videos, replacing the facial mask brand recommended by Huang with a competing brand. It also added links to the competing products to generate sales.
The Yuhang District People’s Court in Hangzhou, Zhejiang province, ruled that the conduct amounted to false advertising.
The court said misleading advertising does not only involve making false claims about a product’s quality or characteristics. It can also involve creating a false impression about a product’s relationship with a celebrity or another person who appears to promote it.
In this case, the media company’s actions could lead consumers to believe that the facial mask products had been recommended or endorsed by Huang, even though they had not, the court said.
The SPC highlighted the ruling as an important guide for livestreaming businesses and said it establishes a clear bottom line for their conduct.
It also said the decision helps protect consumers’ rights and promotes the honest and orderly development of the livestreaming industry. –The Daily Mail-China Daily news exchange item
